Changes to the colour of the Boardroom

Based on what evidence?

This year a study was published which found that out of 10,000 executives less than half of FTSE 100 firms had no non-whites at board level, and two-thirds had no full-time minority executive directors.The study can be found here http://www.green-park.co.uk/press-release-britains-competitiveness-risk-deep-diversity-deficit-says-new-study/

In additon a report by the charity Business in the Community found 6% of senior managment positions were held by people from ethnic minorities. 7.9% of management positions were held by black, Asian and minority ethnic people in 2012, compared with 10% in total employment in the UK. The management figures have edged up from 5.5% and 6.8% respectively since 2007. The BITC report called for ethnicity to be added to the UK corporate governance code, which sets out standards of good practice and states: “The search for board candidates should be conducted, and appointments made, on merit, against objective criteria and with due regard for the benefits of diversity on the board, including gender.”

The study can be found here http://www.green-park.co.uk/press-release-britains-competitiveness-risk-deep-diversity-deficit-says-new-study/

The government was quoted as saying “Vince Cable wanted to encourage a more diverse workforce and the obvious place to start was with women. He thinks businesses make better judgments when they have a diversity of opinions at the top. We feel like we have achieved a huge amount in terms of women and boards, but if you look at diversity in terms of ethnic minorities there is a huge amount of work to do. If we thought the problem in terms of female representation was bad, the problem with visible ethnic minorities is potentially even worse because you can count on one hand the number of visible ethnic minority heads of business or people on boards of FTSE companies.”

Importantly the move was welcomed by the Institute of Directors. “We have long advocated boardroom diversity, including a broad range of expertise, backgrounds, age, gender and skill sets. Forward-looking businesses recognise the benefits of pursuing this. Where, as with mining companies, an entire sector has historically appointed directors from too narrow a social pool, shareholders are forcing change in the interests of better business. Voluntary efforts to improve gender diversity are proving effective, and this is the model to follow in other areas.”

The report by Phillips and Webber was followed by further research from the charity Business in the Community which found 6% of senior managment positions were held by people from ethnic minorities. The charity’s report found 7.9% of management positions were held by black, Asian and minority ethnic people in 2012, compared with 10% in total employment in the UK. The management figures have edged up from 5.5% and 6.8% respectively since 2007. The BITC report called for ethnicity to be added to the UK corporate governance code, which sets out standards of good practice and states: “The search for board candidates should be conducted, and appointments made, on merit, against objective criteria and with due regard for the benefits of diversity on the board, including gender.”

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